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Is Limelight Networks, Inc.'s (NASDAQ:LLNW) CEO Being Overpaid?

Simply Wall St

Bob Lento became the CEO of Limelight Networks, Inc. (NASDAQ:LLNW) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Limelight Networks

How Does Bob Lento's Compensation Compare With Similar Sized Companies?

Our data indicates that Limelight Networks, Inc. is worth US$488m, and total annual CEO compensation was reported as US$3.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$480k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.

Thus we can conclude that Bob Lento receives more in total compensation than the median of a group of companies in the same market, and of similar size to Limelight Networks, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Limelight Networks has changed from year to year.

NasdaqGS:LLNW CEO Compensation, December 5th 2019

Is Limelight Networks, Inc. Growing?

On average over the last three years, Limelight Networks, Inc. has grown earnings per share (EPS) by 88% each year (using a line of best fit). In the last year, its revenue is down 7.7%.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Limelight Networks, Inc. Been A Good Investment?

I think that the total shareholder return of 79%, over three years, would leave most Limelight Networks, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared the total CEO remuneration paid by Limelight Networks, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Limelight Networks insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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